East Anglia: Lloyds PMI survey reveals record increases in output and new orders for region’s firms in October

Steve Elsom of Lloyds Bank Commercial Banking

Steve Elsom of Lloyds Bank Commercial Banking - Credit: Archant

October saw record increases in output and new orders among private companies in the East of England, according to a new survey.

The headline Lloyds Bank Commercial Banking East of England Business Activity Index, a seasonally adjusted index that measures the combined output of the region’s manufacturing and service sectors, accelerated from September’s 58.5 to a record-high of 60.0 last month.

The Lloyds Bank Commercial Banking East of England PMI survey, on which the index is based, showed that output and new orders both grew at their fastest rates in survey’s history while the volume of outstanding business accumulated at its quickest pace in nearly seven years.

The rate of job creation also accelerated sharply, showing its biggiest month-on-month improvement in more than six-and-a-half years.

Output in the region has now grown for 11 months in succession, with companies mainly commenting on increased new business. Sector data suggested that activity rose in both the service and manufacturing sectors.

Incoming new business also expanded at a record pace in October. According to anecdotal evidence, increased export business and the securing of new clients led to the sharp rise in order intakes.

In line with increased output and new orders, East of England companies took on more staff during October. The rate of job creation accelerated to the quickest since March 2007 and was broadly in line with that seen at the overall UK level.

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At the same time, unfinished orders accumulated at the fastests rate in nearly seven years, as companies struggled to process a sharp rise in incoming new work. The accumulation of backlogs was centred around the services sector.

Higher raw material prices, increased utility bills and rising staff costs all contributed to a further rise in input costs in the East of England, with the rate of inflation reaching its highest level since February.

But despite the acceleration of input cost inflation, companies raised their output charges to a lesser degree than in the previous month and charge inflation in the East of England was below the UK average.

Steve Elsom, Lloyds Bank Commercial Banking area director for SME banking in East Anglia, said: “Ths month’s Purchasing Managers Index presents an uplifting picture for businesses in East Anglia and October’s data hints at a prosperous future for firms as we head towards the New Year.

“Business activity has not only increased for the eleventh month in a row, but job creation has also risen to the sharpest point in more than six-and-a-half years. In addition to this, firms have also found their existing business is accumulating at the fastest rate in nearly seven years.

“After speaking to business leaders across the East of England, the latest Lloyds Bank Regional PMI reading showed that many are experiencing an increase in new orders, driven by an increase number of customers and a rise in exporting. As a result, firms have recruited new staff at the quickest rate since March 2007 and are evidently preparing to continue bolstering their activity.

“The overall findings of the survey echo the upturn in economic growth seen earlier in the year, as well as the recent Q3 GDP figures which showed an increase of 0.8%for the UK.

“With the strong rise in levels of new work, an increase in employment and more firms taking advantage of exporting opportunities, we’re hopeful this momentum will continue throughout the remainder of the year and into 2014, so that we can see a truly robust economic future across East Anglia, and the UK.”